Strategic Planning as a Management Tool for Any Organization

Abstract

Strategic planning is a management tool that organizations use to drive their mission and vision forward. This essay takes a look at the steps taken from the point of formulating the planning strategies to their implementation. It also discusses how the vision and mission of a company are an integral part towards achieving future success. From the essay, one gets a better understanding of what mandates are. Since formal and informal mandates are usually confused for one another, this paper goes into deeper explanations using examples to show their differences. Once all the necessary steps of formulating and integrating a strategic plan in an organization, it is gradually implemented within the workforce. In the end, for a strategic plan to be effective, it has to be evaluated every now and then. This is because businesses, both for profit and non-profit, go through changing life cycles. As such, they necessitate the reassessment of these plans as the environments in which they operate in also change with time.

Keywords: strategic planning, organization mission, organization vision, company future

The strategic change cycle is an activity carried out by an organization’s management team to set achievable goals and objectives for employees and other stakeholders. It is a process where a company directs its resources towards strengthening operations and adjusting these operations according to changes in the environment. For this process to be successful, the management should assess where the organization is going, how it will get there and determine when it has been successful. This paper will look at the steps taken during the strategic change cycle, from formulation to implementation of strategic plans.

Discussion

The strategic change cycle undergoes ten steps in its process. Below is an overview of each step and what it entails.Strategic Planning ProcessStrategic planning is fundamental for any organization to survive, whether it is for profit or not. Planning ensures that all activities within the company are accounted for; therefore, strategies are formulated to drive the organization forward and well into the future. As such, a strategic planning process is necessary as it provides a step to step guide on what a firm requires to progress (Bryson, 2018). There are some key points that should be taken into account when planning for the future.Mission. Every company needs a mission statement for any planning to start. A mission statement explains the backbone of the company.

According to Gruber (2016), it gives meaning to what the company is all about and how it came into being. Without it, stakeholders do not have an anchor to the company. Mission statements are short, precise and easy to understand and ensure that every person who comes across the company does not mistake it for another. It is the identity of any organization.Vision. They say ‘a man without a vision is dead’. The same is the case for any company. An organization’s vision tells clients and employees alike where the company is going. One cannot go where they do not know without direction. As such, a company’s vision is its compass and directs all stakeholder efforts (Gruber, 2016). All plans and strategies are thus directed towards achieving this future goal.It is interesting to note that top-level employees are not the only ones concerned with fulfilling the mission and vision of an organization. It is important for them to make sure that all stakeholders understand the core mission of the company and where it is going. By doing so, they ensure that everyone is on track towards spearheading the company forward and ensuring its continued success.

Organizational Mandates

Before a company can run in a legal capacity, there are some critical mandates that need to be fulfilled. Some are formal while others are informal, and these span across all organizations. Many people tend to assume that all organization mandates are legal matters that require the attention of the legal department. Although many, if not most, company mandates tend to be legal, there are some that are informal in nature but just as critical (Gruber, 2016). As such, below is a brief explanation of both informal and formal organization mandates.Formal Mandates. These are mandates demanded by the state and may vary depending on the size of the company and its operations. Both profit and not-for-profit organizations are required to file for a corporate business license. They also need to register the name of the business, obtain tax identification numbers, register for taxes and acquire local and state permits. The legal departments of companies are also charged with incorporation documents, articles of incorporation among other legal papers. Once the company becomes a licensed business, other legal papers are required to cover employees and other stakeholders. Depending on the company, some of these mandates include Family and Medical Leave policies, Worker’s Compensation Insurance, as well as paying Social Security.

Informal Mandates

There are some laws that an organization must follow that do not necessitate the attention of a lawyer. These may include proper chemical waste disposal as with manufacturing companies or the disposal of information-sensitive documents within the company. These are delegated to supervisors and should therefore be included in all strategic plans of the organization. They are a critical part of planning as they require funding, which has to be accounted for in the planning process (Uphill, 2016). Other informal mandates come in the form of bonuses or ‘perks’, traditions, gifts, or even benefits. Most people do not differentiate between the two mandates, which leads to a lot of confusion and disagreement. After reading about it and understanding each mandate, it is good to note that they both entail different approaches within the company.

Organizational Mission and Values

As seen earlier, an organization that lacks a mission or vision is set for failure. The two elements always go together as they complement one another. For a company to start planning for the future, it has to consider where it has come from and what to do in the present moment (Booth, 2017), then after formulate plans to achieve this future (vision). Likewise, the vision of the company is achieved or steps are taken to achieve it by looking at the core (mission) of the organization. When both elements are communicated to the stakeholders effectively, they act as the engine behind the vehicle, which is the organization in this case.Since they go hand in hand, we will look at the vision and mission of a company together. In order to understand them, one has to answer the ‘W’ and ‘H’ questions: who, what, why, where and how. A mission statement is short and should have the ability to answer these questions. Similarly, the vision statement should be precise and show the direction that the company wishes to take (Booth, 2017).

Take, for example, United Health Group (UHG)’s Mission statement: To help people live healthier lives and its vision: Company dedicated to making healthcare work better. Both are simple and precise and show that, at its core, the company's dedication is to promote healthy living and ensuring that healthcare works better.The ‘what’ answers the reason for a company’s existence. Going back to our example, UHG is quite straight forward as to what it does. Its aim is to offer better healthcare options in order for people to live healthier lives. Uphill (2016) explains that ‘when’ pertains to the tine the company started and gives it credibility, especially if it has been in business for many years. Stakeholders are able to trace back to when the company was started and align their strategies to see its continued survival in the future.‘Where,’ answers the operation ability of the company. Some companies are local businesses while others are global conglomerates. When employees and other stakeholders are clear on whether the business is local or international, necessary planning strategies can then be taken (Bouhali, Mekdad, Lebsir and Ferkha, 2015).

Large corporations usually entail more planning details and strategies as compared to small businesses. Therefore, being clear on the scale of business is imperative to forming the right planning strategies. The why brings all the ‘Ws’ together as it explains the reason behind the company’s existence. As with the ‘who’, this part should be able to motivate employees towards fulfilling the mission and vision of the organization. Just as students need clarity on their assignments from their teachers, employees need clarity from their employers. The mission and vision of companies are usually mashed up by people. Therefore, it is good to know that they both carry different weights towards achieving company success.

External and Internal Environments

A company is said to run in two environments: the internal and external. The former pertains to factors that affect it from within, such as employee performance, communication, and innovation among others. The latter refers to those factors affecting the firm from outside and which it cannot control (Bryson, 2018). Typically, these involve supplier behavior, political atmosphere, environment factors, etc. In order to form strategic plans that will aid the company in achieving its goals and objectives, managers need to carry out an SWOT analysis.SWOT is an acronym that stands for the Strengths, Weaknesses, Opportunities and Threats that affect a company. An organizations strengths are those factors that are an asset to its operations, such as innovative employees and excellent after sales services. Its weaknesses are those factors that affect sales and operations negatively (Bouhali et. al, 2015) such as high employee turnover rates or weak distribution channels. Both of these factors affect the company’s internal environment. As such, it can directly control them by either minimizing or maximizing their influence.

During strategic planning, it is important to highlight strengths and weaknesses as they guide implementors on where to increase funding and where to encourage particular practices.The external environment consists of factors out of reach of the company’s influence. However, the company can mitigate their impact by putting in place necessary strategies. Opportunity is one such factor where, an organization may face favorable circumstances in the market where it can turn a profit. For example, a manufacturing company may be faced with new opportunities when there is advancement in production technology. On the other hand, threats are obstacles that firms face due to changes in the industry. Such include factors like substitute products. When there are many suppliers of products that are similar to another company, the said company usually loses some valuable customers, which is a threat to profit. It is eye-opening to realize that a company’s strengths may become its weaknesses in certain situations. Similarly, its threats may become opportunities when faced with the prospect of losing business.